Genetic studies have implicated the Saccharomyces cerevisiae POL4 gene product in the repair of DNA double-strand breaks by nonhomologous end joining. Here we show that Pol4 preferentially catalyzes DNA synthesis on small gaps formed by the alignment of linear duplex DNA molecules with complementary ends, a DNA substrate specificity that is compatible with its predicted role in the repair of DNA double-strand breaks. Pol4 also interacts directly with the Dnl4 subunit of the Dnl4-Lif1 complex via its N-terminal BRCT domain. This interaction stimulates the DNA synthesis activity of Pol4 and, to a lesser extent, the DNA joining activity of Dnl4-Lif1. Notably, the joining of DNA substrates that require the combined action of Pol4 and Dnl4-Lif1 is much more efficient than the joining of similar DNA substrates that require only ligation. Thus, the physical and functional interactions between Pol4 and Dnl4-Lif1 provide a molecular mechanism for both the recruitment of Pol4 to in vivo DNA double-strand breaks and the coupling of the gap filling DNA synthesis and DNA joining reactions that complete the microhomology-mediated pathway of nonhomologous end joining.